Amahl S. Azwar, The Jakarta Post, Jakarta | Business | Fri, January 11 2013, 10:50 AM
Paper Edition | Page: 13
PT Chevron Pacific Indonesia becomes the largest investor in Indonesia’s upstream hydrocarbon industry this year by contributing almost US$4 billion to the sector, the Energy and Mineral Resources Ministry said.
The firm’s investment is valued at 17 percent to the total US$23.5 billion investment of 74 oil and gas contractors in the country who have entered the production phase, interim upstream oil and gas regulatory task force SKMigas planning deputy Widhyawan Prawiraatmadja said on Thursday.
In 2012, Chevron’s approved work plan and budget (WP&B) comprised around $2.7 billion in investment, which means the firm’s investment in 2013 has increased by 37 percent from last year.
“Chevron still dominates [the investment in the oil and gas sector] this year and is expected to remain a major investor in the coming years due to their huge production,” the official said.
Investment from other major upstream players this year remains fairly the same as last year, he added. France-based Total E&P Indonesia, for example, contributed $2.5 billion in investments this year, according to their 2013 approved WP&B or relatively around the same figure as last year.
Total becomes the second major oil and gas investor this year while state-owned PT Pertamina’s upstream subsidiary, Pertamina EP, reached third place with $2 billion in investments.
Chevron is also the top crude oil producer for Indonesia, a former Southeast Asian member of the Organization of Petroleum Exporting Countries (OPEC) who has experienced output decline in the past few years due to aging wells.
In 2012, Chevron’s average daily oil production reached 342,000 barrels per day (bpd) or up by 3.6 percent from the previous target of 330,000 bpd. The firm’s production alone accounts for 40 percent of Indonesia’s oil output of around 870,000 bpd.
Pertamina EP became the second-largest oil and gas producer in 2012 by contributing 127,900 bpd of oil last year, below the initial target of 134,000 bpd. The firm has lowered their output target for 2013 to 130,000 bpd due to aging oil wells.
Total, meanwhile, followed in third place with around 76,000 bpd of oil. The firm, who holds the South Mahakam block in East Kalimantan, aims to reach around the same amount of production this year.
Chevron Indonesia spokesman Dony Indrawan said the firm had spent more than $30 billion in investments over the last 10 years with the 2013 WP&B being its largest investment in the last 25 years.
Chevron is currently working on projects that include the expansion of the firm’s Duri field in Sumatra with an investment of Rp 4.8 trillion ($500 billion) as well as the multibillion dollar Indonesia Deepwater Development (IDD) plan in the Makassar strait.
The firm, however, has sent a letter to SKMigas on the 2013 investment, stating that its current legal problem in which four of its workers have been alleged of corruption in an environmental project, may push them to “lower their investment in Indonesia”.
Commenting on this, SKMigas’ Widhyawan said that, while the task force “understands” the troubles faced by Chevron, the firm cannot simply alter what they have already committed to in the approved WP&B.
“However, we are aware that these legal problems may thwart Chevron’s daily operations and thus lower their production, which is something we do not want to happen,” he said.